Traps To Watch For When Licensing Office 365

Traps To Watch For When Licensing Office 365

With Office 365, Microsoft is pushing all its customers to ongoing subscriptions rather than one-off software fees (with a side course of maintenance). There are benefits in that approach, but what traps should you watch for when shifting from conventional Office licensing?

Gartner analyst Michael Silver highlighted some issues to watch out for during the recent Gartner Symposium/ITxpo in Queensland. We’ve already looked at Silver’s thoughts on moving to Windows 10. Here are some of the issues for Office 365 in the enterprise he highlighted in the same presentation.

Don’t assume you can use Office 365 Home licences. Office 365 Home is cheap and allows for multiple installations, so there’s a fair chance that some of your staff will have their own copies which they will install on their mobile device. However, it’s a violation of the licence to use that for work purposes.

The same applies to the free versions of Office for Android and iPad, which recently added editing features to the free versions. “The problem is that’s only free if you’re a consumer and you’re not allowed to use those features for business,” Silver said.

Beware of automated upgrades. When you shift to Office 365, updates are deployed automatically in a process managed by Microsoft. If you use a generic Office installation, that eliminates one major headache. But if you have customised Office you’ll have issues. “The biggest Office headache is still application compatibility issues — plug-ins and third-party products,” Silver said.

The solution there might be to defer upgrades, but you won’t have a choice about holding for long. If you sign up for Office 365 ProPlus, the contract requires you to update to the latest version (whether manually or via Microsoft’s automated process) within 12 months. “The biggest worry that my clients are telling me when they sign up for this is whether their customers will be able to meet that requirement,” Silver said.

You can’t hold onto old contracts forever. Faced with those challenges, you might try negotiating with Microsoft for an extension — but even if you’re talking a large deal, that won’t hold water for long. “If you ask for an extension, you’ll get 12, 18 or 24 months at best,” Silver said.

Beware of discounts. Microsoft is keen to move enterprise customers to Office 365, so you may be offered discounts — but check the details carefully. “Make sure you get price caps in the contract, or your list price will revert to the higher level on renewal.”

Train staff to connect regularly. The core Office 365 apps run locally on each user’s machine, but do need to sign it to Microsoft at least once every 30 days or they’ll stop working. Make sure users are aware of this requirement, and keep an eye on laptops in shared pools.

Don’t buy Exchange if you don’t need it. Silver notes that Microsoft heavily promotes its E3 licences, which include Exchange, but that the cheaper E1 option remains available. “E1 is definitely an option if you’ve decided you really want to outsource your mail. I hate to see Microsoft imply that E3 is the only way to go.”

Make sure you have a decent network. If you do let Microsoft handle the updates, expect a lot of network traffic. “It’s very bandwidth intensive,” Silver said.


    • It’s been taking off for a while. Universities/schools/goverment/big-business – all of them ‘rent’ Microsoft (and other) products. It’s cheaper per-license, and when contract is renewed they get the latest version. I’m only new in IT, but it’s been happening since at least Vista days.

    • Yep. Companies with a highly mobile workforce love Office 365 because it is licensed per user and not per device. Even if the workforce isn’t mobile it is preferable because its easier to count people than devices.

      Likewise companies and organisations where the staff numbers fluctuate a lot also love subscription licensing. They may need the software for 1-2 years, and it is considerably cheaper than buying a perpetual license.

  • Your comments re: Exchange are confusing. “Don’t buy Exchange if you don’t need it.” E1 licenses get you Exchange as does E3. The difference being E3 licenses give you installed Office apps, E1 only gives you access to Office online. For companies looking for installed Office apps but no Exchange, they need to look at either Office 365 Business or Office 365 Pro Plus.

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